DBS: Three gd moves in 2010

DBS seems to be getting its act together. In November, the CEO (FT turned citizen) said he planned to improve return on equity by building businesses that cater to wealthy individuals and small companies, and by expanding in China, India and Indonesia. Well with two moves made in December, he seems to be keeping to his word.

Earlier in the month, it annced the sale of its asset management arm to Japan’s Nikko Asset Management for S$137 million. DBS will then acquire a 7.25% stake in Nikko Asset and distribute Nikko funds through its branches throughout the region. This move shows it is prepared to exit businesses where it is mediocre at best.

Earlier in the year, it appointed Bertie Cheng, the retired CEO of POSB that DBS bought years ago and ran down, as adviser on how to rebuild DBS/ PosBank local retail presence. (Yes POSB became PosBank.) This move shows it acknowledged its FTs goofed in S’pore retail as in almost everything.

The chairman, true-blue S’porean Peter Seah, has been shaking up the place, telling the FTs that dominate mgt to shape up or ship out. They are shaping up. Proves what Ngiam Tong Dow said: the people running the show should be locals, not foreigners. And I agree with his definition of “locals”. He includes FTs who have been around a long time here. Note that it is very expensive for a US citizen to give up his US passport. He has to pay lots of taxes before the US allows him to dump his passport.